This week it became apparent that PSA Peugeot-Citroën and General Motors are having talks about the possible takeover of GM’s European division by the French automaker. This includes the Opel and Vauxhall brands, which have been a decade-long money drain on General Motors. The two automakers have been working together closely on the development of a handful of models and are looking for opportunities to boost each company’s profitability, which includes a sale of the two brands. GM has had a stake in PSA until 2013 when it became apparent that projected savings from their cooperation and platform sharing would fall short of expectations. After this breakup, the French company had to be bailed out by the French government and its Chinese partner Dongfeng Motor, which each control 14% of the shares.
Would a new, more intense cooperation bring the promised synergies? And does this mark the start of a much-needed wave of consolidations in the European car market? Or will it only cause PSA to lose focus on its own financial recovery and resurrection of its brands? Let’s look a the pros and cons for both parties involved:
